Can You Change Your Software Contracts Unilaterally?

As a software copyright attorney, I was wondering if you read all the electronic contracts you enter into (yea right). But just in case you had, you may have noticed one sentence in certain contracts that states that one party (always the party that wrote the electronic contract) can change the software contract “…at any time, in its discretion….”

You probably have heard about this particular case, as Blockbuster was supposedly transferring movie rental information to Facebook accounts, without the express advance permission of the Blockbuster account holder (in essence people had automatically opted into this program, called “Beacon”). This program was widely reported and Blockbuster was subsequently sued.

Blockbuster claimed that the case could not be brought in court as it had to be resolved through arbitration as provided in the Blockbuster ‘Terms and Conditions.’ However, the court ruled that as Blockbuster included language in the contract stating that any contractual term could be changed–at any time, in its discretion–the arbitration clause was therefore not enforceable.

If you really think about it, a contract is supposed to be a fixed agreement between two parties, and neither party can change it without the permission/consent of the other party.

Just a suggestion for any Software or SAAS based company, which of course is relying on its end user/customer contracts to be enforceable.

By the way, keep in mind that policies can generally be changed without permission, but this case was about contracts not policies.

Disclaimer: This is for informational and education purposes only, and is not legal advice.